Multi-employer bargaining and flexible work laws start today

The Workplace Relations, Employment and Safety team
06 Jun 2023
Time to read: 3 minutes

All employers who face an enterprise bargaining process on the horizon should be urgently considering their industrial strategy now.

Today (6 June 2023) marks the day that multi-employer bargaining changes and flexible work changes commence – some of the most significant reforms in the Secure Jobs, Better Pay Act (SJBP Act). As of today, bargaining and requests for flexible work arrangements as we know it are about to get a whole lot different.

When the SJBP Act was legislated, we provided an overview of some of the key changes. Set out below is a brief refresher of the changes starting today.

Multi-employer bargaining

To encourage bargaining, the SJBP Act reduces barriers to multi-enterprise bargaining and expands the power of the Fair Work Commission (FWC) to resolve bargaining disputes, up to and including by arbitration.

Single interest employer authorisations

The SJBP Act makes significant changes to the single-interest employer authorisation bargaining stream. A key change is that it repeals the term “single interest employers” and introduces “common interest employers” who can bargain together for a multi-enterprise agreement.

The SJBP Act seeks to ensure employers with clearly identifiable common interests can more easily bargain together. It provides that the operations and business activities of common interest employers must be reasonably comparable for the purposes of making or varying a single interest authorisation or agreement.

For employers with 50 or more employees, the onus is on the employer to establish it is not a common interest employer or its operations and business activities are not reasonably comparable with the other employers.

The changes also make it easier for employers to be added to an existing single enterprise agreement, or an existing single-interest employer authorisation, including without the employer’s consent (provided a majority of employees approve), with the following caveats:

  • Employers who employ fewer than 20 employees may not be added to a single interest employer agreement or authorisation without their agreement; and
  • The FWC will have the discretion to refuse an application to add a new employer to a single interest employer agreement or authorisation if the FWC is satisfied that, on the day it will approve the relevant application, less than 9 months have passed since the most recent nominal expiry date of an agreement.
Supported bargaining

This is a stream of multi-enterprise bargaining designed to assist industries with low agreement coverage. The administrative side of the new supported bargaining stream is not dissimilar to the low paid bargaining stream (which it replaces), but the SJBP Act has sought to overcome the historical issues with the low paid stream by removing the definition of low paid, which was interpreted narrowly and precluded employees accessing the stream, with a broader common interest test.

This allows the FWC to consider matters such as the prevailing pay and conditions in the industry and whether the employers have common interests. The intention is to make it easier for employees to access this stream than the old low paid bargaining stream. While employees can apply to the FWC to have themselves and their employer added to a supported bargaining authorisation without the employer’s consent, the vote is done by employer cohort, meaning that if employees of one named employer don’t vote in favour of the agreement, the agreement won’t apply to them.

Co-operative workplaces

The new term for multi-enterprise agreements, the co-operative workplaces stream will have some key differences, including the ability for employer and employees to become covered by an existing multi-enterprise agreement and to be added to a multi-enterprise agreement.

Other key changes: written consent, carve-outs

A new requirement that an employer negotiating as part of a multi-enterprise agreement must obtain written consent from each union acting as a bargaining representative for the agreement prior to putting the agreement to an employee vote to either approve or vary the agreement. This effectively gives unions an extraordinary veto power over voting.

A carve-out for the construction industry. Under the changes, employees who perform excluded work, defined as “general building and construction work”, cannot be covered by a multi-enterprise agreement (including work in the “civil construction” sector, and not including work in the asphalt industry).

Replacement agreements

The Act removes the need for a notice of employee representational rights to be issued to commence bargaining for a replacement enterprise agreement. A replacement agreement is defined as one which will replace an existing agreement which had a nominal expiry date within the last 5 years and which covers a substantially similar scope of employees. In that case, bargaining will commence on written request from an employee bargaining representative.

This is a much simpler and less procedural approach to commencing bargaining. It also removes opportunities for employers to resist bargaining; in the case of an existing expired agreement, a majority support determination will no longer be required to force an employer to commence bargaining.

Enhanced FWC powers

Complementing the reduced barriers to bargaining and enhanced access to multi-employer bargaining are stronger powers for the FWC to assist in resolving bargaining disputes, including a simpler and faster pathway to arbitration.

  • Intractable bargaining declarations – the new intractable bargaining scheme shifts the focus from individual bargaining representatives’ compliance to the overall progress of the dispute. Where negotiations have become “intractable”, the FWC will now have the power to issue an intractable bargaining declaration and, after an optional period of time for the parties to continue negotiating, proceed to issue a workplace determination.
  • Fewer barriers to arbitration – The FWC is able to arbitrate bargaining disputes by issuing a workplace determination after they’ve issued an intractable bargaining declaration. The process to arbitration therefore has fewer steps (no need to get a bargaining order, then a serious breach declaration), which may lead to more arbitration. There are also reduced requirements for all parties to consent to FWC assistance with a bargaining dispute, making access to FWC intervention easier than before.

Flexible work arrangements

The SJBP Act changes the requirements relating to requests for flexible work arrangements and introduces new provisions empowering the FWC to resolve disputes regarding such requests.

Employers will now be required to meet with employees to discuss requests for flexible work arrangements and cannot refuse a request before discussing alternative working arrangements with employees.

An employer who receives a request for flexible working arrangements must now:

  • meet with an employee to discuss their flexible work request; and
  • where the employer intends to refuse the flexible work request, agree upon alternative changes to the employee’s working arrangements and note the agreed changes in the employer's written response; or
  • if the employer still intends to refuse the request, outline the employer's reasonable business grounds for refusal.

For the first time, the SJBP Act has introduced a dispute resolution mechanism for circumstances where an employer has:

  • refused a flexible work request; or
  • not provided a written response to a flexible request within 21 days; and
  • the parties are unable to resolve the dispute through discussion at the workplace level.

Where a flexible working arrangement dispute arises, conciliation should be the first avenue of dispute resolution (unless there are “exceptional circumstances”). Where conciliation is unsuccessful, or “if urgency is required”, the FWC will now have the power to "deal with a dispute as it considers appropriate" or through mandatory arbitration, with the FWC being able to make binding decisions.

When do I need to take action?

Now – the changes are now in effect. All employers who face an enterprise bargaining process on the horizon should be urgently considering their industrial strategy now. We can assist you in framing that strategy and preparing for the new world of enterprise bargaining.

Employers should also be urgently reviewing and taking advice on their current practices for considering and responding to requests for flexible work arrangements to ensure they reflect these important changes.

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.